It’s Time to Tap into Labor’s Fortress of Finance

Despite the recent upsurge in worker militancy, union membership and density have been declining for decades. But a close look at labor’s finances suggests that unions have the economic resources to potentially reverse this decline.

Standard explanations for labor’s decline blame our grossly unfair labor laws, the full-scale corporate attack on organizing and collective bargaining, and economic trends including the decline of manufacturing.

But labor is not a passive bystander. Unions have the resources to deploy to new organizing and growth. They have chosen to pursue a defensive financial strategy instead.

Consider the National Education Association. Since 2010 its membership has declined by nearly 300,000 — while its net assets more than doubled.

The United Auto Workers has seen membership drop by 20 percent since 2007, yet over the last three years less than 10 percent of its budget was spent on organizing.

Twenty-five years ago, John Sweeney was elected to lead the AFL-CIO after a vigorous debate about organizing strategy. Sweeney set out real organizing goals for the affiliate unions, and proposed that they devote 30 percent of their budgets to organizing. Many of the affiliates rebelled, and the goal was quietly shelved.

Today UNITE HERE (my former union) is one of the few unions that devotes significant resources to organizing, up to 50 percent of its budget — consistently running operating deficits, spending more than its dues revenue. As a result, it was one of the fastest-growing unions before the pandemic, increasing its membership by 34 percent from 2010 to 2019.

FLUSH WITH CASH

In 2021, large unions booked $18 billion in revenues (mostly from dues) and spent $15.5 billion on operating expenses — leaving a surplus of $2.5 billion.

Though labor’s revenues are far less than those of business associations, they’re substantially bigger than those of environmental, human rights, and political organizations.

In 2021, organized labor had $31.6 billion in net assets (assets minus debt). That’s more money than any U.S. foundation but one: the Bill and Melinda Gates Foundation, with $48 billion.

While union membership declined by more than 700,000 from 2010 to 2021, total revenues increased by 33 percent over the decade, thanks to higher dues (the average rose from $778 per member in 2010 to $1,089 in 2021) and significant increases in investment, rental, and miscellaneous income, such as government training funds and royalties from selling membership lists.

Meanwhile, unions cut staff by 20 percent — they employed 24,540 fewer employees in 2021 than in 2010 — a 20 percent decline in the workforce. (Management positions in unions, however, increased by 64 percent, and more than 10,000 union employees now earn salaries over $125,000.)

Unions also paid out an average $78 million a year in strike benefits during this time — less than half a percent of net assets or revenues in most years. Overall, union spending increased only 18 percent over the decade.

As a result, unions generated large budget surpluses, and their net assets more than doubled. If these trends continue, labor’s assets could double again by 2031.

FORTRESS UNIONISM

These figures suggest that labor had substantial assets available to deploy to new organizing and growth — but chose not to do so.

Instead, to the degree it is pursuing any conscious strategy, the labor movement has followed the one laid out in a 2013 article by union researcher Richard Yeselson: “Fortress Unionism.”

Yeselson argued that, due to the straitjacket of labor law and an “uninterested working class,” labor should not undertake “lengthy and expensive campaigns to organize new sectors.” Organizing workers “takes too much time,” he wrote, “and it costs too much in money and staff resources to do so over that long period of time.”

He counseled that labor should “work to buttress the areas in which it is already strong” and “[d]efend the remaining high-density regions, sectors, and companies.”

Meanwhile, unions should “wait for the workers to say they’ve had enough” — at which point workers themselves would “militantly signal that they want unions.”

It’s long past time to adopt a dramatically different approach. We shouldn’t let labor hide behind the idea that it doesn’t have the resources to fund large-scale organizing. It does.

We should demand that our unions — from the local level to the AFL-CIO headquarters — back the current upsurge with a massive investment of resources.

This is a portion of a blog that originally appeared in full at Labor Notes on October 26, 2022. Republished with permission.

About the Author: Chris Bohner is a union researcher and activist who has worked with the AFL-CIO, Teamsters, UNITE HERE, Culinary Workers Local 226, and a variety of worker centers. 

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.